What Is a Merchant Initiated Transaction (MIT)
A Merchant Initiated Transaction (MIT) is a payment initiated by the merchant, not the cardholder. The cardholder is not present at the time of the charge — they gave consent in advance for such operations.
Examples of MIT:
- Monthly subscription billing (Netflix, Spotify, SaaS platforms)
- Overage billing after exceeding a plan limit
- Post-service payment (e.g., car rental charges after return)
- Automatic retry after a failed recurring charge
MIT differs from CIT (Cardholder Initiated Transactions), where the cardholder actively enters payment details or confirms the payment.
Why Banks Decline MIT
Banks apply strict controls to MIT transactions because the cardholder is not present and cannot intervene in real time. Common reasons for decline:
- No mandate established. MIT requires prior consent — a mandate. If the first payment did not go through 3DS with a CIT flag, the bank may decline all subsequent MIT charges.
- Network token or card details expired. The card was reissued and the stored token is outdated.
- Bank updated its MIT policy. Some banks periodically require mandate re-authorization.
- Incorrect network transaction ID. The first payment should have stored a transaction ID used as a reference in subsequent MIT. If the ID is wrong or missing, the bank declines.
- Incorrect transaction type flags. The merchant sends MIT without the proper flags (stored_credential, payment_type, original_transaction_id).
How to Set Up Mandates Correctly
For MIT to work properly:
The first payment must always be a CIT with 3DS. The cardholder physically confirms the payment. The request includes
stored_credential: {type: "first_use"}.Save the network transaction ID from the first payment. This is used in subsequent MIT requests as a reference to the mandate.
For subsequent MIT charges, use
stored_credential: {type: "recurring"}and pass the saved network transaction ID.When a card is reissued, obtain updated details via Account Updater (Visa or Mastercard) or ask the user to update their card.
Monitor response codes. Code "54" (expired card) or "82" (invalid CVV) means the card needs updating — simply retrying will not work.
FAQ
How is MIT different from a regular recurring payment? MIT is a broader category that includes recurring payments but is not limited to them. Any payment without the cardholder actively present is an MIT.
Is 3DS required for MIT? Not for the MIT itself. However, the first payment in the series (mandate setup) must go through 3DS authentication.
What should I do if a bank suddenly starts declining an established mandate? A new CIT with 3DS must be initiated to re-establish the mandate. This typically means the cardholder needs to log into the site and re-confirm their subscription.
Need a card that works reliably with MIT and subscription billing? Try Marix. Our cards comply with Visa and Mastercard international standards.